Candlestick Trend Indicator v0.5 by JustUncleL

The Candlestick Trend Indicator v0.5 by JustUncleL indicator identifies trend-following candlestick patterns and price action setups to provide high-probability entry signals.

Usage

The Usage section describes how the script can be used, with specific focus on pattern recognition and trend confirmation. Users can identify continuation and reversal opportunities by observing the colored bars and on-chart labels.

Pattern Recognition

The indicator identifies several specific candlestick patterns:

• Continuation/Trend Patterns: Bullish and Bearish Engulfing, Harami, PinBars, Piercing Line, and Dark Cloud Cover.
• Price Action Bars: Uses color-coded bars for Inside Bars (Yellow), Outside Bars (Orange), Shaved Bars (Aqua/Fuchsia), and Reversal PinBars (Red/Green).
• Fractal S/R Breaks: Identifies when price breaks the last fractal support or resistance, signifying potential trend strength.

Trend and MACD Filtering

To improve signal quality, the tool uses two primary filters:

• Moving Average: A customizable MA (default Hull MA 20) determines the primary trend direction. Signals are confirmed when they align with the slope of this line.
• MACD Confirmation: An optional MACD filter ensures momentum is on the side of the trade. If enabled, bullish patterns only trigger if the MACD histogram or direction is positive, and vice-versa for bearish patterns.

Interpreting Alerts

The tool plots dots at the bottom of the chart to indicate confirmed trade conditions. Green dots signal a bullish trend-following setup, while red dots signal a bearish trend-following setup.

Details

The script integrates logic from multiple technical analysis concepts to create a comprehensive trading strategy. It utilizes fractal levels for support and resistance detection, drawing lines across the chart to visualize key breakout zones.

The "Moving Average Variant" function allows users to switch between ten different MA types, including Zero Lag EMA (ZEMA), Hull MA, and Double EMA (DEMA), providing flexibility for different market conditions. The pattern recognition logic uses specific percentage-based wick and body requirements (e.g., PinBar wick percentage) to ensure only valid price action structures are highlighted.

Settings

General Settings

• Fast MA Type: Selects the calculation method for the trend-following line (SMA, EMA, WMA, VWMA, SMMA, DEMA, TEMA, HullMA, TMA, ZEMA).
• Moving Average Length: The lookback period for the trend MA.
• Moving average Source: The price source used for MA calculations (default is Close).
• Hide Fractals/Levels: Toggles the visibility of fractal triangles and S/R level lines.

Pattern Selection

• Use Fractal S/R Cross/Dark Cloud/Piercing Line/etc: Individual toggles to enable or disable specific candlestick patterns.
• PinBar %: Defines the minimum percentage of the candle range that the long wick must occupy for a valid PinBar.
• CM Price Action Toggles: Enables or disables specific Price Action bar types (Inside, Outside, Shaved, Reversal).

Confirmation Filters

• Alert Only Patterns Following Trend: When enabled, patterns are only highlighted if they align with the MA direction.
• Alert Only Patterns Confirmed by MACD: When enabled, patterns must be confirmed by MACD momentum.
• MACD Lengths (Fast/Slow/Signal): Standard MACD parameters to tune momentum filtering.

FAQ

How do I interpret the different bar colors? Lime and Maroon bars represent confirmed trend-following patterns. Other colors like Yellow (Inside Bar) and Orange (Outside Bar) represent standard price action setups that may require further confirmation.

Can I use this for timeframes other than Binary Options? While originally optimized for Binary Options and Forex, the multi-indicator setup is suitable for 1hr, 4hr, and Daily charts across various asset classes.

How do I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.